When it comes to Infrastructure as a Service - renting on-demand compute, storage and network resources that live in a multi-tenant virtualised public cloud - midsized businesses are jumping in with both feet. But large enterprises with their own well-established data centres are still dipping their toes in the water.
The overall usage of public cloud IaaS is certainly on the rise (see IBM and Redhat join OpenStack) according to industry analysts. But many large enterprises are moving at a very deliberate pace, one workload at a time.
"Most enterprises we work with are taking a hard look at where cloud fits into their operations. But it's not about putting one project out there and another one inside," says Edward Newman, senior director at EMC Consulting. "It's more about looking at each workload within each application and deciding based on performance, price, functionality and trust level which loads can be deployed in public, multi-tenant clouds.''
In a survey published in January of more than 600 enterprise and mid-market companies globally, only 27 percent said they were using public cloud IaaS services. That's up 10 percent from a similar survey published in early 2011. But 28 percent of respondents said they have no immediate plans to jump into the cloud, and another 24 percent said they haven't pulled the trigger on a cloud deployment yet, but plan to at some point in 2012.
Mark Bowker, senior analyst at Enterprise Strategy Group, which published the survey, summarises the results this way: "Those three indicators combined show there is some good momentum behind widespread business adoption for public cloud infrastructure services, but we are not there yet.'' Bowker adds that he's generally quite bullish on the prospect of enterprises embracing the public cloud long term.
"Public cloud IaaS is rapidly becoming an accepted technology approach to doing business," adds Gartner vice president of research Lydia Leong. She published a Gartner Magic Quadrant on public cloud IaaS in December that profiled 20 vendors. Leong identified Amazon, Bluelock, CSC, Savvis and Terremark as market leaders, with Joyent and Rackspace as market visionaries and GoGrid, IBM, NaviSite and OpSource as challengers.
Enterprise deployment trends
While midsize businesses are more willing to outsource IT compute cycles en masse to public cloud IaaS providers, larger organisations are selectively testing the waters, using public IaaS primarily for these specific use cases:
1. For research and development projects and load testing.
2. As an opportunity to build and deploy new Web-based applications built to run natively in the cloud that are so compelling to the business that even the most conservative IT folks are willing to accept the perceived security risks, the subpar auditing capabilities and the lack of management tools associated with IaaS.
3. As a way for IT operations to move non-critical, legacy applications that are not subject to regulatory monitoring off expensive on-premise data centre resources.
4. For specific line of business applications where the managers in those units want to act quickly on a new opportunity and don't want to wait for IT to provision internal resources.
5. As the underlying infrastructure for a software-as-a-service (SaaS) or platform as a service (PaaS) offering being consumed by the enterprise.
Gartner's Leong says early adopters have been very successful in theses types of selective rollouts over the past two years and are now poised to make public cloud IaaS a more mainstream practice in their companies.
IT gets out ahead
Paul Burns, founder of Neovise LLC, a Fort Collins, Colo.-based research firm specialising in cloud computing, says enterprises are now taking a more strategic planning approach for future use of the public cloud. "Yes, there are still pockets of rogue developers who think they don't need IT to build and test new virtualised applications, but there is much less of that these days," Burns says. "CIOs are now telling their teams to get a public cloud strategy in place and roll it all the way down to the workloads where it makes sense. Planning helps contain cloud sprawl."
IT managers using public cloud IaaS are quick to extol its virtues. They point to the delivered upon promise of instantaneous scaling that both provides elasticity to handle peak workloads and gives IT an overall "can do" image when other departments come to them to explore technology driven initiatives.
ETS gives cloud high marks
Dan Wakeman is vice president and CIO of Educational Testing Services (ETS) in Princeton, N.J., which currently uses CSC's CloudCompute in a hybrid deployment where the compute power sitting in the cloud has a secure dedicated tunnel back to ETS's large Oracle database.
Wakeman says the combination gives the company flexible computing power necessary to develop, administer, and score more than 50 million tests at 9,000 locations worldwide annually. "When partners come to us with new ideas that might have been put on the back burner due to lack of IT staff time and resources before we were using the cloud, now we can take them on," Wakeman says.
IT managers are also able to hold IT staffing levels steady while taking on more internal projects because provisioning servers that used to take days or weeks now takes just hours. "It is indeed slightly cheaper for us from month to month to run our operation in the cloud," says Jonathan Newbury, vice president of E-commerce and Technology at Preferred Hotels.
The Chicago-based hotel reservation services company has employed Terremark's public cloud offering - called Enterprise Cloud - since late in 2008. "But the real cost benefits comes when you look at the huge number of new projects we've been able to take on without adding any new IT staff because they are no longer running to the colo to manage the servers," Newbury says.
And, the pay as you go billing allows them to shift from sunk capital costs to operational costs that can be directly tied to revenue streams. "What IT department doesn't want that direct justification?" Wakeman says.
Experts recommend buying a hybrid
The analysts and practitioners interviewed for this article all predict that the majority of public cloud IaaS usage in the enterprise will encompass hybrid installations that also pull together on-premise machines, traditional hosting services and private cloud virtualised services.
The good news is the growing number of cloud service providers gives enterprise customers a wide range of choices on how they want to implement a hybrid cloud, says IDC analyst Melanie Posey. "They can go with a single provider to get all the services needed or they can pick best of breed hosting and best of breed virtualized services."
However, there are competing notions of what a hybrid deployment comprises. In one scenario, hybrid cloud means splitting a single application's workloads between public cloud computing power and a highly protected premise resource, such as a large database. The second involves an organisation selecting different IaaS products for different workloads and requires that they all be managed uniformly.
It's the management of either flavor of these hybrid environments that is going to be a point upon which vendors - both IaaS providers themselves and third-party cloud management and orchestration software vendors -- can differentiate themselves, says Kacy Clarke, principal architect with the consultancy Cloud Technology Partners.
Currently the usability of exposed APIs that let IT build its own automation tools to spin up servers in the cloud, for example, or the quality of customer management portals varies greatly, contends Amy Larsen DeCarlo, principal analyst for Ssecurity and data center services at Current Analysis. Going forward, these APIs and management portals are going to need to do role-based management, set up virtual LANs and allow for pre-assessment planning and post assessment analysis.
Another differentiator for IaaS providers will be how well they can pick up IT business while making their underlying service as open as possible so customers don't feel like they are locked into their particular IaaS scheme, Clarke says.
"Enterprises want portability. They want to be able to move workloads in and out of the cloud and their own networks at different times in the application life cycle,'' Clarke says. And they want to be able to pull their workloads off the cloud if either technical or economic issues arise, Clarke adds.